Local home prices now on the rise

Local home prices now on the rise

March 18th, 2012 Mark Hite is president of the Greater Chattanooga Association of Realtors in Realestate

The median price of homes sold in 2012 is showing a marked increase over 2011 and 2010.

Based on information provided by the Greater Chattanooga Association of Realtors, the median price of all homes sold thus far in 2012 is $127,150.

That is a 3 percent increase over the 2011 median of $123,500 and 2010 of $123,250. This is welcome news for home sellers and those considering selling property this year.

The median price is an important measurement tool, as it represents the midpoint of all properties sold in a given period. As a point of reference, the median price peaked in 2007 at $139,100 for our area. While the current median reflects a decrease of 8.5 percent from this unsustainable high point in pricing, it is a positive sign when you compare it to the declines in values experienced since this peak.

As we have reported previously, the bottom of home prices seemed to be hit in 2010. Since that time home prices have edged up and down from month to month, with no sustainable trend in either direction.

There are a number of factors that indicate that 2012 will be the year that prices in our market will finally make a turn to the positive. First of all, inventory is down in comparison to previous years. To be exact, there are 20 percent fewer homes available for sale than there were at this time last year. This reduced inventory combined with increasing sales should support further price stabilization and increases over the course of the year.

A second factor to consider is the lack of new inventory coming to market to replace homes that are selling. While warm weather brought a surge in new listings in January, new inventory coming to market has trailed last year each of the last four weeks. If this trend continues, we should see further reduction in the number of homes for sale and push prices up as well.

I am not suggesting that we will see a return to the pricing of 2007 in the short term. I do believe that if you are a buyer who is waiting for housing prices to fall before getting in the market to buy, then you need to get started today. There is no indication that prices are going down further, in fact it appears they are heading up.

If you are a seller who has been waiting for the market to stabilize, then you need to call a Realtor today. Find out what your home is worth and what improvements you need to make to take advantage of this rebounding market of 2012!